Originally published on 2/1/21, updated on 3/14/24
Tax season is upon us, which means you’re probably receiving a flood of questions from your employees. “When will I receive my W2? How many deductions should I put down? How do I get my W2 from a previous employer?”
But before you give too much advice to employees, it’s important to understand what’s legal and what’s not as their employer. Here’s everything HR teams need to know to be helpful to employees during tax season (without breaking the law).
Who can give tax advice?
The first thing employers should understand during tax season is if you’re allowed to give tax advice at all. Of course, as an HR professional, your goal is always to be as helpful as possible, but sometimes a misguided bit of advice could have serious legal consequences. Here are a couple of general rules to follow:
Giving tax advice isn’t illegal. If you work in HR, you’re likely trained on tax basics, like how to fill out a W4 and how to approach common deductions like charity donations. So offering general guidance to your employees is totally fine.
Our one word of warning? You’re liable in the unlikely case someone decides to sue you for giving them bad advice. So just make sure the information you’re providing is accurate, and always position your tax tips as just that: tips that employees can take or leave.
Filling out someone’s W-4 — or any of their other forms — is illegal. Never, under any circumstances, fill out individual tax forms on behalf of your employees. That’s up to them, or their tax advisors.
When do employers have to send W-2 forms?
What’s the employer W-2 deadline? By law, employers must send W-2 statements to all of their employees no later than January 31 of each year.
W-2 forms are a record of any income your employees received from you, as well as any payroll taxes you withheld from them. You’re required as their employer to provide this form, no matter how low their wages or earnings were in the past year.
Do employers have to mail W-2 forms?
Short answer: no. Although that’s the way it’s traditionally been handled, employers are not required to mail paper W-2 forms to their employees. Many companies now offer digital W-2 forms, which their employees can download and print themselves if need be. Saving the planet, one step at a time!
If you do decide to go old-school, here’s a printable W-2 form for employees that you can fill in and mail out.
Penalty for employer not sending W-2 forms
Failing to send your employees their W-2s on time can get you into trouble. The IRS can fine your company $60 per W-2 form if you send them 1-30 days late, with a maximum fine of $220,500 for small businesses or $630,500. And if you’re more than 30 days late, they can charge you $120 per W-2, with a maximum fine of almost $1.9 million. And it goes up from there.
Let’s just say it pays to be on time.
How to prepare for tax season
Top companies today are providing support for their employees during tax season in a number of ways, all of which are completely legal. Here are a few of our favorites:
1. Lunch and learns
A great way to provide expert tax help is to offer lunch and learns or all-hands meetings with certified tax professionals. At these events, tax advisors usually give a brief overview of tips and important information for the year, and your employees can bring in their tax questions and get real answers from people who know what they’re talking about.
These events can be especially helpful because your employees may feel more comfortable getting tax help in a work setting. It can be intimidating to go to an accountant’s office and not know what to ask or what to bring. This type of introduction can make this process less stressful for your employees.
Here are 11 tips for running a successful lunch and learn remotely.
2. Employee discounts at a tax firm
Another great idea is to partner with a good local tax firm and offer employees a discount to get their taxes done professionally. In this scenario, you should lean on your accounting and finance department to do some vetting for you, and come back with a recommendation of a local or national organization that’s willing to partner with you on a company-wide discount.
3. Offer DIY options with a corporate discount
Finally, many companies are offering up access to technology that will help employees do their taxes themselves. If you’ve ever turned on your TV during tax season, you probably know the ones we mean. (TurboTax commercials, anyone?) With a few calls, it’s easy to set up a corporate discount option with many of these platforms.
So, to sum up: how far should you go in giving tax advice to your employees? As far as you need to to make sure the advice is solid. Whether that involves boning up on the issues yourself and accepting the slight risks that come with that…or bringing in help from the outside, the important thing is that your employees will want to high-five you (and not slap you) when all is said and done.
